Research On The Risk Of China's Direct Investment In Mongolia

The Twenty-first Century is a time of global economic integration.It is impossible to rely on the strength of a country to develop its own economy.Taking the road of internationalization has become an inevitable choice.Although the economic and trade cooperation between China and Mongolia has a good basis,there are many frictions between the two countries,which affect the risk of economic cooperation between the two countries.How to identify these risk factors and avoid and prevent them has become the primary conditions for China's direct investment in Mongolia.This study aims to identify the risk factors of China's direct investment in Mongolia,and puts forward some countermeasures and suggestions to avoid and prevent risks,so that China's direct investment in Mongolia will be able to maximize revenue.Therefore,this study has some theoretical significance and practical value.Based on the theory of direct investment and risk management,this paper makes a theoretical and Empirical Study on the risk of China's direct investment in Mongolia.The research content is composed of three parts.Firstly,the paper analyzes the current situation and characteristics of China's direct investment in Mongolia and provide a basic analysis of the risk of China's direct investment in Mongolia.Secondly,the paper analyzes the risk of China's direct investment in Mongolia.With the help of expert questionnaire,it identifies 6 major risk factors of China's direct investment in Mongolia.The major risk factors are a change of government,changeable policy,the legal environment of investment instability,weak infrastructure,public opinion,the imperfect financial system and the economic competition between Japan and South Korea.The paper analyzes the risk of the merger of the Chinalco Ltd and the South Gobi Ltd to further illustrate the risks.The main reason for the failure is Mongolia's changing policy and legal factors and the presence of more alert and vigilance in the acquisition and merger of Chinese people and the government of Mongolia.Finally,the paper puts forward some countermeasures to strengthen the risk prevention of China's direct investment in Mongolia.China should attach importance to the development of the high-level exchanges of visits between the governments of the United States and Japan and the economic interaction between the United States and Japan,strengthen policy communication and cultural exchanges with Mongolia,and improve China's foreign investment law.